Have you ever been asked to be an Executor? Are you waiting to be asked the “big question”? Do you realize the commitment, loyalty and responsibility it takes to be an Executor? Chances are, you have yet to be an administrator of a loved one’s Will or Estate Plan.
Is being an Executor the right choice for you?
Making the choice to be an Executor is really up to you. Before you take on the responsibility of being the appointed Executor of a Will or Estate Plan make sure you know what you’re getting into.
As an Executor you are generally compensated for your time and efforts. At the same time, if you make a mistake you may be held personally liable. That’s why you also need a competent attorney if you agree to serve in this role. Committing to be an Executor is not a decision to be taken lightly.
?How big is the job as an Executor?
The size of the job depends on several factors:
- How much property is involved?
- How long the process is likely to take?
- Whether there might be parties who question your decision.
- Whether there are special considerations such as the care of under-age children or incapacitated parties.
As a Fiduciary (the Executor is in a Fiduciary relationship with the Beneficiary), you may be required to:
- File a Will with the court to start the probate process.
- Locate and take control of assets.
- Run a business or hire a manger.
- Assume responsibility for the care of children or incapacitated parties.
- Pay debts and collect proceeds of insurance policies.
- Sell assets not used and reinvest the assets wisely.
- File tax returns and prepare accountings for the probate process.
- Distribute the assets to the Beneficiaries.
If you agree to serve in one of these roles, make sure to hire an attorney. The Estate you’re serving will cover that expense and having an attorney will keep you from breaching any number of fiduciary duties the court might hold you to.
?What are the most desirable qualities in an Executor?
- Perseverance is the key in dealing with bills (especially the hospital, Medicare, ambulance and doctor charges incurred if there was an illness). These often require a lot of paperwork, and payment first, then reimbursement from insurance companies.
- You must have the time and inclination to deal with bureaucrats and forms. You may also have to cope with relatives who may be wondering why it’s taking so long to receive their inheritance, or why their bequests are smaller than they expected. This can happen if, for example, the money of the decedent was aggressively invested in the stock market, and those stocks nose-dived after they wrote the Will.
- You have to be resourceful and competent to hire a CPA and-or lawyer to handle tax returns and income tax returns for income accrued before the death, Estate tax returns as well as Estate income tax returns for income taxes incurred after the death.
- As an Executor you may also have to find and hire an investment advisor, particularly if the value of the Estate has changed substantially because of changes in the market.
- An Executor cannot be a minor, convicted felon, or a non-U.S. citizen.
Note: While all states allow nonresidents to act as executors, some require a nonresident to be a primary beneficiary or close relative; others require a surety bond or that the out-of-state executor engage a resident to act as his or her representative.
Do you have what it takes to be an Executor?